Exclusive: Lightspeed and Matrix to lead $6 Mn seed round in Dukaan

Dukaan that recently levelled allegations of plagiarism over Sequoia Capital-backed Khatabook is in an advanced stage to close its seed financing. Lightspeed and Matrix are in conversations to lead a $6-7 million round in Dukaan’s holding entity - Rankz Inc, said three sources aware of the details of the transaction.

“Lightspeed and Matrix have been finalising the contours of the deal for the past month and if nothing goes wrong from here, the transaction is likely to be completed by the end of the next month,” said one of the sources on condition of anonymity. “The company was also in talks with Sequoia, but it didn’t move further because of Dukaan’s ongoing issues with Khatabook.”

Sequoia is one of the early backers of Khatabook. The Bengaluru-based company was also part of Sequoia’s accelerator program - Surge. Last week, Rankz, the holding company of Dukaan, had sent a legal notice to Khatabook’s holding entity for copying its logo and user interface.

Khatabook launched a similar app - Dukaan by Khatabook - early this month. It’s worth noting that Rankz Inc’s Dukaan has been live on Play Store since June 2. Rankz’s founding team has close ties with Khatabook’s founding team, right from Housing days. It used to offer digital marketing and consulting services to both companies. 

“Parallelly, Dukaan is also in talks with some top angels in India and Silicon Valley. However, these talks are preliminary,” said the second source. The person also requested anonymity. 

Dukaan is expected to dilute about one-fourth of the company in the current transaction. “It will be valued around $25 million in its maiden fundraise,” added the above-quoted person.

Dukaan allows small businesses to set up online stores instantly and let them share inventories and offerings on WhatsApp. According to SensorTower data, Dukaan has over 600K downloads with about 23,000 daily active users. 

Entrackr queries sent to Lightspeed and Sequoia on Sunday remained unanswered until the publication of this story while Dukaan’s co-founder Suumit Shah declined to offer any comment. Queries to Matrix didn’t elicit any immediate response. We will update the post as and when the two VC firms respond.

Besides Khatabook, Dukaan directly competes with Instamojo and other e-commerce enablers. Interestingly, Lightspeed-backed Magicpin had also started similar services that let merchants go online in minutes through Orderhere.io. In the long term, these applications would compete with WhatsApp Business.